Food Wise 2025

Chapter 2 - International Context

EU Policy Framework

Negotiations on a major reform of the Common Agriculture Policy (CAP) and Common Fisheries Policy (CFP) covering the period 2014-2020 were completed in 2013. Moreover the current Multiannual Financial Framework (MFF) for the EU budget fixes budget ceilings for EU agricultural spending up to 2020. In terms of EU policy, therefore, stability can be expected as far as 2020.  Beyond that date, the position is less clear and it is difficult to predict with any certainty what the policy drivers may be from an EU context beyond 2020, although the shape of CAP is likely to remain similar to what it is today with greater emphasis on payment equality and on sustainability.

The reformed CAP provides for the expiry of milk quotas from 2015, the progressive rebalancing of direct payments between and within Member States and the introduction of additional agri-environmental requirements both in Pillar 1 and Pillar 2.  The focus of the CFP is to provide the framework for the long term sustainability of fish stocks, the continued economic viability of fishing fleets and fish processing, to support coastal communities and to contribute to a fair standard of living for the fisheries sector including small scale fisheries.

With the exception of the tillage sector, the predominance of permanent grassland in Ireland will cushion most Irish farmers from the effects of the greening obligations in the current CAP reform package.  However, longer-term, there may be pressure to tighten the definition of permanent grassland that may increase the impact on Irish farmers.  

The Irish model for redistribution of direct payments is designed to ensure that the direct payments system is made fairer and more equitable while at the same time ensuring that the level of redistribution of payments between farmers is not of a scale that could jeopardise the achievement growth objectives. Given the extent of EU Member States operating or moving to flat rate direct payments, beyond 2020, it could be expected that further reforms will follow the trajectory of further redistribution between farmers towards a flat rate.

A review of the MFF is due to commence in 2016 with a view to its completion by 2017.  Bearing in mind the extent of negotiations that were needed to reach agreement on the existing MFF, it is difficult to see much appetite during the review for major changes in EU Member States’ contributions, in overall funding or in allocations between budget headings in respect of the current MFF.  Thus, it is to be expected that the funding currently allocated to the CAP and CFP in the existing MFF will remain in place until 2020. 

However, the 2016 review will inevitably feed into negotiations for a revised MFF from 2020 onwards.  In that respect there is no absolute guarantee of retention of existing funding levels for the CAP beyond that point.  There will be pressure particularly from the net contributor Member States to reduce (or at least limit) the EU budget and of course there will be competing pressure for funding between competitiveness, cohesion, agriculture and possibly other headings. It is too early to predict the outcome of these negotiations but Ireland will be seeking to maintain funding levels for CAP beyond 2020.

UK renegotiation of relationship with EU

UK is the biggest destination for Irish agri-food exports and therefore the issues associated with any possible UK exit from the EU and UK renegotiation of its relationship with the EU must be monitored and managed to minimise potential negative impacts. The terms of any renegotiation or exit would be important from Ireland’s perspective but there could be possible implications in a number of areas such as animal health, plant health, food labelling, state aids, competitiveness, veterinary restrictions, cross border trade with Northern Ireland and trade with Great Britain, EU budgetary implications and knock-on effects for CAP budget and adjustments to the EU Common Fisheries Policy.

International Climate Change Policy

Reducing the extent of future climate change by limiting the amount of greenhouse gases being emitted, and by increasing the rate of removal of CO2 from the atmosphere is a significant global challenge. The agriculture, forestry and other land use sector is responsible for 24% of the global emissions, thus to reduce its impacts on climate change there is clear need to develop robust mitigation strategies that can lower emissions and deliver a low carbon future. The United Nations Framework Convention on Climate Change (UNFCCC) provides the framework for international policy development on actions to address climate change through mitigation and adaptation and it has targeted major reductions in GHG emissions with developed countries including Ireland expected to play a leading role.